Pennsylvania skill gaming bill challenges existing tax plan

Article by : Charles Perrin Mar 7, 2024

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A bill to regulate skill games in Pennsylvania is contesting the amount the state wishes to collect in taxes.

Last year, the Pennsylvania courts ruled that the grey machines, which resemble traditional casino machines, aren’t illegal gambling devices as they incorporate a level of skill.

There has been a concerted push by legislators to establish a robust framework for skill games, but in his proposed 2024/25 budget bill, Gov. Josh Shapiro (D) sought to impose a 42% tax rate on skill games.

The thinking behind Shapiro’s plan was that the state could generate roughly $150 million in new tax money during the 2024/25 fiscal year.

More pertinently, Shapiro suggested the tax stream would be projected to rise and could grow to north of $300 million annually by the 2025/26 fiscal year.

However, House Bill 2075, which was introduced towards the end of last month by a bipartisan group of 20 House lawmakers, thinks the suggested tax rate is too steep.

Instead, state Sen. Gene Yaw, a leading skill games proponent, is urging for the tax rate to be slashed to 16%.

Supporters of the bill say small businesses would benefit from the proposed tax suggestion, even though it would cut into the state’s share.

As things stand, although HB 2075 was passed to the House Gaming Oversight Committee last week, no date has been scheduled for a review of the skill gaming measure.

Casinos remain up in arms about the regulation of skill games, insisting that they will impinge upon their slot play and have an adverse impact on iGaming.

Currently, there are 17 brick-and-mortar casinos in PA, and they pay 54% tax on slot machine revenues.

The Pennsylvania Gaming Control Board reported record growth for the state gaming industry in 2023, with casinos and online gaming interests taking $5.7 billion from players.

Nevertheless, finding a suitable resolution to the skill gaming bill should be the main priority to satisfy all parties concerned.